Hyland v. State Bar of Cal.

Decision Date13 June 1963
Citation31 Cal.Rptr. 329,382 P.2d 369,59 Cal.2d 765
Parties, 382 P.2d 369 William John HYLAND, III, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent. L. A. 27040, 27041.
CourtCalifornia Supreme Court

William John Hyland III, Beverly Hills, in pro. per., and Edward B. Stanton, Los Angeles, for petitioner.

Garrett H. Elmore, San Francisco, and Karan F. Minick, Los Angeles, for respondent.


In two proceedings before local administrative committees of the State Bar (for Los Angeles County) petitioner was found guilty of four counts of professional misconduct. In both proceedings the Board of Governors of the State Bar adopted, with minor modifications, the findings of the local committees and recommended disbarment.

Petitioner seeks review of both proceedings. He contends, without elaboration, that the 'recommendations and findings of the Board of Governors were based upon insufficient evidence and are contrary to law.' This unsupported allegation does not fulfill the requirements of Rule 59(a) of the California Rules of Court and does not sustain petitioner's burden of showing that the action of the Board of Governors is erroneous or unlawful. (Bus. & Prof.Code, § 6083; Hatch v. State Bar of California, 55 Cal.2d 127, 128, 9 Cal.Rptr. 808, 357 P.2d 1064.) Moreover, we have reviewed the record and found that the board's findings and recommendations are sustained by the evidence.

Petitioner graduated from the University of Pennsylvania and from Harvard Law School, and was admitted to practice in California in 1952. The transactions that led to these proceedings occurred between 1954 and 1959.

The first matter involves petitioner's representation of Mrs. Hazel D. Hahn, a 61-year-old widow. The board found and the evidence shows that on May 14, 1954, Mrs. Hahn retained petitioner to represent her in the sale of certain real property. A few days later, petitioner prevailed upon Mrs. Hahn to sign various documents, including a deed conveying title to the real property to petitioner, as trustee for himself, Mrs. Hahn, and a third party, and a five-year option in petitioner's favor on the real property, for which he gave no consideration. Petitioner did not explain these documents to Mrs. Hahn, and she did not understand what they were.

Thereafter, petitioner sold an option on the real property, and later an extension of the option, for which he received $9,000. The option was never exercised. He entered into an agreement to sell the real property to a religious organization. The organization took possession, and invested $20,000 in the property, including payments on existing encumbrances. Petitioner then agreed to buy out the organization for $25,000. He failed to make payment as agreed. Over a period of nine months several extensions of time to make payment were agreed upon, and still petitioner failed to pay. At the end of that period, he persuaded the organization to accept $16,500 for its interest.

These transactions were entered into without the knowledge or consent of Mrs. Hahn. In October, 1956, petitioner sold the property for $91,000. He wilfully failed and refused to render an accounting of the proceeds to Mrs. Hahn. Mrs. Hahn sued petitioner and obtained a $10,000 default judgment, and ultimately recovered $3,500 from the proceeds of the sale in escrow.

The evidence shows that petitioner disregarded his fiduciary duty to his client and assumed a position adverse to her in the sale of her property. He commingled funds he held as trustee with his personal funds. Because petitioner failed to keep records, the exact amount that he converted to his own use without his client's knowledge or consent cannot be determined. Even crediting the many unsubstantiated expenses claimed by petitioner, however, the board's finding that no less than $2,800 was so converted is sustained by the evidence.

In the second matter petitioner was retained by Melvin Hassler in April, 1957, to prosecute a claim for personal injuries and property damage. The written retainer agreement provided that petitioner was to receive one-third of the amount recovered if the matter was settled without court action. No court action was instituted and in July, 1957, the matter was settled for $4,500. The insurer of the party obligated to pay sent petitioner a draft for $4,500 payable to Hassler, his insurer, and petitioner. Petitioner obtained the endorsement of Hassler and his insurer, and on July 26, 1957, negotiated the draft for cash at the Wilshire-Oxford Branch of the California Bank.

The board found and the evidence shows that petitioner thereafter converted the entire proceeds of the draft to his own use without the knowledge or consent of Hassler and without rendering an accounting to Hassler. Hassler made repeated unsuccessful efforts to collect the sum due him from petitioner. In April, 1958, petitioner sent Hassler a check for $2,204 and a promissory note for the same amount. Neither the check nor the note were signed. Petitioner explained to Hassler a few days later that if Hassler wished to lend him the money, petitioner would sign the note, and if Hassler did not wish to lend the money, petitioner would sign the check. Hassler made no decision until August, 1958, when he asked petitioner for the money. Petitioner said that he did not have the money available, but signed the check and asked Hassler to hold it for a few days. He said he would notify Hassler when the money was in the bank.

After waiting for a week or two weeks Hassler deposited the check. It was returned to him marked 'refer to maker.' He again asked petitioner for the money but did not receive it. In January, 1959, petitioner sent Hassler a proposed agreement and asked him if he wished to invest the money due him in a radio station. Hassler did not sign the agreement. He complained to the State Bar in January, 1960.

Petitioner claims that he paid Hassler a total of $2,750. There is no evidence to substantiate that claim. Even if it is true, however, petitioner admits that he paid Hassler nothing before 1959 and that in addition to the $2,750 he claims to have paid, $600 was due. By his own admission, therefore, the check he wrote for $2,204 in 1958, even had it been honored, was less than the amount he owed Hassler.

In the third matter, petitioner was employed in March, 1959, to defend Kenneth W. Matthews in a criminal action in which Matthews was charged with issuing bad checks. Matthews informed petitioner that he believed the amount of his worthless checks held by the police was about $1,800. Petitioner suggested that Matthew's chances of probation would be increased if he made restitution prior to sentencing, and for that purpose Matthews requested $1,800 from his brother, Teddie W. Matthews. Teddie turned over a check in that amount to petitioner, after telling petitioner that the funds were to be used only to redeem bad checks and were not to be delivered to Kenneth. petitioner signed the following writing: 'March 26, 1959. Received from Teddie W. Matthews $1800 Cashier's Check for payment on bad checks of Ken Matthews. An accounting is to be rendered to Teddie W. Matthews at close of Ken. Matthews case. W. J. Hyland.' Petitioner deposited the check in the Reseda Branch of the Bank of America, opening a new trust account under the name of 'Wm. J. Hyland III, Trustee Account.'

The evidence sustains the board's findings that petitioner thereafter willfully commingled these trust funds with his onw funds, that he wilfully misappropriated some of the trust funds, and that he wilfully failed to render an accounting to Teddie W. Matthews. In violation of the trust, petitioner gave Kenneth $250 of the trust fund. At least $55 of that sum was used for purposes other than redeeming bad checks. Petitioner appropriated $425 from the trust fund as his fee for representing Kenneth. Teddie did not consent to either appropriation, and only learned of them sometime after they occurred. Petitioner ignored Teddie's protests, and never met his demands for an accounting.

The evidence regarding the disposition of the balance of the trust fund is in conflict. Petitioner failed to produce any adequate records. His testimony on the matter is inconsistent in several respects and is contradicted by other evidence. The bank records and the testimony of Kenneth and another witness sustain the board's finding that petitioner wilfully converted and commingled with his own funds some $780 of the trust funds in addition to the $425 he took as his fee.

The fourth matter concerns petitioner's representation of Edward J. Preston in Wyoming Pacific Oil Co. v. Preston, an action filed in the Los Angeles County Superior Court in 1952. Preston retained petitioner in February or March, 1955, shortly after service of the complaint upon him by the attorney for Wyoming Pacific. On March 16, 1955, Preston's default was entered in the Wyoming Pacific action. Petitioner learned of the entry of default sometime in March. He informed Preston that he would move to set aside the default, but in fact he did nothing. In the following months Preston frequently questioned petitioner about the status of the case, and on each occasion was told in substance that he should let petitioner do the worrying, that petitioner was the lawyer, and that everything was under control.

In November, 1957, Preston's default in the Wyoming Pacific action was proved and a $6,185,000 judgment against him was entered. The judgment was reported in the Los Angeles newspapers, and a friend of Preston's who read the article clipped it out and sent it to Preston in Montana. Preston immediately called petitioner. Petitioner was not aware of the judgment, but he assured Preston that he would take steps to have it vacated.

Petitioner at this time mistakenly believed that under section 473 of the Code of Civil Procedure the six-month period for setting aside a default ran from the entry of...

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